Walz is announcing his budget today. I haven't reviewed it yet, but something that popped out that he tweeted:

"My budget proposes a 20 cent increase in the gas tax to keep Minnesotans safe, help businesses and farmers get goods to market, and ensure nothing like the I-35 bridge collapse happens again. #OneMinnesota"

Didn't we recently discuss it would only take a few cents of gas tax to make Metro Transit fare free? He's proposing 20 cents! wow!

But the current MN constitution prevents this hypothetical revenue from going to transit, right? Despite that, there are workarounds if there's political will... right now the general fund and other tax sources cross-subsidize our driving infrastructure, so new gas tax revenue could free up existing revenue for transit. That said, seems far riskier compared to having a dedicated revenue stream for transit.

His budget also calls for a 1/8th cent addition to the metro transit tax and (maybe most significantly) a shifting of Metro Mobility off Metro Transit's books. That's where the transit money is in this proposal, and it's significant.

The main benefit of a gas tax increase, barring a future change to the constitution, would be that it would make driving costlier and hopefully provide an increased disincentive.

The main benefit of a gas tax increase, barring a future change to the constitution, would be that it would make driving costlier and hopefully provide an increased disincentive.

You obviously don't run a business that has a fleet of commercial vehicles. With wages alone we have increased rated to our customers over 15% over the last 2 years in the mean time eating almost 10% of the profit in order to keep the increase that low. The new gas tax doesn't sound like much, but it takes a toll on smaller businesses that are already being pinched in many other areas.
I understand you despise everything vehicle related, but the reality is there are many that depend on that same vehicle for their livelihood.

No, it's for funding suburban road expansion. All gas tax is constitutionally "used solely for highway purposes". Motor vehicle sales taxes are what get split 60/40% in favor of highways vs transit, but they make up a smaller funding source than the gas tax. This is a good source for the complicated way we fund transportation at the state level: https://www.house.leg.state.mn.us/hrd/pubs/hwyfin.pdf

MNDOT has a pretty good section of the MNSHIP dedicated to the "what if" they magically get all the money they want. Spoiler alert, the biggest chunk of change is for "Twin Cities Mobility - MnPASS express lanes, major capacity and spot mobility improvements"

Quick reminder that the price of gas in 2008 jumped up to ~$4 a gallon ($4.68 adjusted for inflation) and stayed there all summer, with diesel even more expensive. So I don't place much credence in the "everyone will immediately go bankrupt if the gas tax raises the price of gas to the previously unheard of level of $2.50/gallon" alarmism.

The main benefit of a gas tax increase, barring a future change to the constitution, would be that it would make driving costlier and hopefully provide an increased disincentive.

You obviously don't run a business that has a fleet of commercial vehicles. With wages alone we have increased rated to our customers over 15% over the last 2 years in the mean time eating almost 10% of the profit in order to keep the increase that low. The new gas tax doesn't sound like much, but it takes a toll on smaller businesses that are already being pinched in many other areas.
I understand you despise everything vehicle related, but the reality is there are many that depend on that same vehicle for their livelihood.

The reality is that if we want to have a recognizable planet in the next fifty years, we need to start reducing how much we drive right now. Lots of things are going to have to get more expensive, and businesses are absolutely within their rights to pass those costs on to consumers. But the choice is between struggling now and struggling even more later, there's not a universe where we get to just ignore this problem and have it go away.

As for what a gas tax increase gets allocated towards, that's a political choice, and we should bend it towards maintenance and no new roads.

Quick reminder that the price of gas in 2008 jumped up to ~$4 a gallon ($4.68 adjusted for inflation) and stayed there all summer, with diesel even more expensive. So I don't place much credence in the "everyone will immediately go bankrupt if the gas tax raises the price of gas to the previously unheard of level of $2.50/gallon" alarmism.

I don't know why I'm such a nerd for sales taxes, but the additional 1/8th cent would bring metro sales taxes to the following levels:
City of Minneapolis: 8.15%
Hennepin suburbs: 7.65%
St. Paul: 8.00%
Ramsey suburbs: 7.50%

Anoka, Dakota & Washington Counties: 7.25% (retained 0.25%** CTIB-era sales tax)
Carver & Scott Counties: 7.5% (were not in CTIB, enacted own 0.50% sales tax for transit/transportation)
**with a simple majority vote of the county board, these three counties could increase the local sales tax by another 0.25% to fund transit/transportation projects, but thus far have opted not to

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I want more details on this additional 1/4-cent tax. I hope it would be controlled by Met Council and not the counties, and dedicated specifically to bus operations/improvements (buses and bus stops). The counties already have 0.25-0.50% taxes to build out rail & bus transitways, and we need better local/arterial bus service more than we need more Gateways and Bottineaus. As Nick has joked many times, given another half cent, Hennepin County would probably plan a subway under 494 before doing anything useful for actual transit riders in Minneapolis.

Good catch! I completely forgot about the downtown sales taxes. My numbers include the first line item (0.5% Citywide Sales tax), but not the 3.0% downtown restaurant/liquor taxes. There's actually a statewide 2.5% tax on liquor receipts not mentioned here as well.

Back to the gas tax proposal, who else was surprised by 20 cents per gallon? And only a two-year phase-in? And tied to inflation beginning in 2022? I have no expectations for that proposal to survive the Senate unscathed...we'll get 10 cents at best, probably with a delayed implementation and/or further delayed inflationary increases.

I'm not sure ANY gas tax can get through the Senate, especially now that Republicans have a 35-32 majority. WTF WAS WALZ THINKING APPOINTING TONY LOUREY TO DHS?! Instead of needing one Republican defector and a unified DFL, we'd now need at least two.

Raising the gas tax isn't done very often because it hits people in rural areas whose lives are built around hauling heavy loads in gas guzzling pickup trucks, and also poor people who can't afford to buy newer more efficient vehicles. The impact on affluent residents of the metro is negligible, hence it's seen as a pretty regressive tax.

Having said that, I think they should kickstart the electric vehicle revolution by raising it a dollar a gallon.

I was shocked to read in the Strib comments (yea, I know) that some families drive 20k, 40k, 50k+ miles per year or more. That's just... ridiculous in so many ways, gas tax aside.

Re: the gas tax. Before the most recent phased increase, it had last been bumped to $0.20 in 1988 where it sat for two decades. Adjusted with the CPI, the gas tax would be 15.5 cents higher today than it is. So I'm not sure a 20 cent increase is that unreasonable.

48 cents/gallon (up from the current 28 c/gal) would be 4th-highest nationwide, behind only PA, CA, WA; just a tad higher than MI & NY. We're ranked #28 right now. A 10-cent increase would still put us at #10 nationally, and the inflationary trigger would probably keep us near the top 10 long-term. A number of states (including red states) have increased gas taxes recently, and I'm fairly sure the linked map includes those increases.

Like I said above, I'm surprised the proposed phase-in isn't significantly longer than 2 years. Walz is clearly giving a TON of wiggle room to possible compromises here. TBH 20 cents is probably dead on arrival. It's a moonshot for sure.

P.S. I think Dayton was pushing 10 cents plus inflation in his 2015 budget, before ultimately dropping it due to Republican opposition. And the Senate actually passed a 5-cent gas tax increase back in 2013 when the DFL had full control of the legislature. Word was that then-Speaker Thissen refused to take it up in the House, and the DFL wound up losing the house in the next election anyways. Whoops.

alexschief wrote:His budget also calls for a 1/8th cent addition to the metro transit tax and (maybe most significantly) a shifting of Metro Mobility off Metro Transit's books. That's where the transit money is in this proposal, and it's significant.

I don't know how Metro Mobility factors in, but 1/8 cent for transit is not much at all. Many regions have 1 cent or more.

mattaudio wrote:Here's a crazy idea.... Why don't we just apply the regular state sales tax to gasoline, in addition to the "user fee" that is the gas tax?

It's been talked about in some corners but is seen as politically infeasible.

Personally I would love to see some gas tax money go to a real highway BRT line and then let someone sue and prove in court it is not a "highway purpose." Doesn't a small amount of gas tax currently go to ATV trails and such?

alexschief wrote:His budget also calls for a 1/8th cent addition to the metro transit tax and (maybe most significantly) a shifting of Metro Mobility off Metro Transit's books. That's where the transit money is in this proposal, and it's significant.

I don't know how Metro Mobility factors in, but 1/8 cent for transit is not much at all. Many regions have 1 cent or more.